Consumer Behavior: A Golden Opportunity for Operators
The pandemic has not dampened the demand for mobile data consumption. In fact, it had the opposite effect. More connectivity has gone hand in hand with mobile and Wi-Fi. This is a very new standard. We all value connectivity much more and have realized how important it is at school, work or leisure. What we once considered a bit of a luxury has now become a necessity.
According to network data, total internet traffic has increased by 20-100% from pre-lock levels. Not surprisingly, healthcare, telemedicine, online gaming, shopping and work accounted for the majority of traffic growth and time spent online, but Ericsson’s most recent ConsumerLab study shows that UK consumers need more help on their 5G journey. Operators have to do more to convince users to convert, and if they succeed, there is a reward. In the UK, the Net Promoter Score, which measures brand loyalty to service providers, scored 24 for businesses using 5G and only 1 for businesses using 4G. This translates into an increase in average revenue per user. UK consumers place a high value on the 5G plans that come with digital services and are willing to pay an additional 7% over the 10% premium they are willing to pay for 5G connectivity.
Government support is important
It is up to carriers to highlight the benefits of 5G by deploying coverage and demonstrating use cases, but it is up to governments to facilitate how carriers can do so. British operators have long complained of difficulties working with local authorities. Three UK recently found that 50% of plan applications were rejected nationally and nearly 100% in London alone.
The UK is unfortunately one of the slowest countries to approve plan agreements. The 2017 Telecommunications Act amendment has not progressed sufficiently, and while we welcome the initiation of consultations on the recent change in permitted development rights for telecommunications infrastructure, it is actually about addressing the lack of regional coverage that is wider than the city’s capacity. The UK needs a sense of urgency to get the most out of 5G. The recent spectrum auction in particular has paved the way for operators to move forward.
However, government support and funding is potentially one of the most likely to have the biggest impact on the UK’s future in the global 5G leadership race. Changes such as planning laws and 5G testbeds and trials, rural shared networks and gigabit connectivity targets are all very positive, but plans need to be put into action quickly to ensure the UK gets the most out of 5G.
right here right now
In the UK, you have to be careful not to be distracted at the most important moments. The telecom industry is still puzzled by the diversification of open networking specifications and the future, even though wireless represents a small fraction of overall telecom infrastructure investments. If these short-term distractions are distracted, there is a real risk that the UK could repeat the fallout from the slow rollout of 4G and build a lead similar to what the US and China did in the global app economy. The UK’s bid for global 5G leadership could be paralyzed by analysis as the telecoms market becomes more complex with the country’s long-term economic competitiveness at stake.
Such short-termism feels like a distraction that the UK cannot afford. We must remain resolutely focused on realizing the immediate benefits of 5G and speeding up carriers to market. More uncertainty and mandatory skills are the last things the UK needs right now. Operators should focus on providing all opportunities for success in immediate 5G deployments. This means that regulation is technology neutral and allows market forces and demand to flourish freely. We need to give UK operators a choice to make their own network architecture decisions and avoid political turmoil.
We need to stay focused on the UK’s 5G rollout journey right here and now.
The full version of this article was first published in UK5G’s Innovation Briefing Issue 6.
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